LYNDAL CURTIS: If I could first appeal to the political machine man in you. Why do you think Barack Obama won the election?

STEPHEN SMITH: Well he got more votes than the other bloke, that’s why he won. But on a more serious point, I always thought he would win and win narrowly. I think in difficult circumstances he has done a good job as President, both on the security side as Commander in Chief, but also in difficult economic circumstances done a lot to try and get the United States economy going.

And it’s always unless a United States first-term President has done a very bad job, generally they’re re-elected. So in the end I also think in a pure campaigning sense that the storm in the last week of the campaign did really stop any momentum that Romney may have been building up. So the outcome was pretty much as I expected. A narrow win on the popular vote, about two per cent, but a reasonably handsome win on the electoral college side.

LYNDAL CURTIS: And there are lessons for, particularly for your side of politics, to learn in the way the campaign was conducted by the democratic organisation?

STEPHEN SMITH: There are always lessons our campaign professionals learn from other campaigns. You can’t transplant a different country’s election campaign or electoral system to our own. A lot of effort clearly went in on the Obama side to getting out the vote in a voluntary franchise.

But our campaign professionals have learnt from the United States and the United Kingdom and other countries just as they learn from us. Rest assured that when we have our election which I expect to be in about 12 months’ time, no stone will be left unturned to see a Labor victory and see the Gillard Government returned.

LYNDAL CURTIS: So you still think an Australian election is likely the second half of next year, there’s not some sense of there are some decks being cleared at the moment?

STEPHEN SMITH: I’ve seen some speculation about an early election. I don’t pay that any heed at all. I’ve always been of the view that this Parliament would go full term. That sees an election campaign, an election September, October, November. So I think we’ve got 12 months to go.

I’ve been saying for some considerable period that when we get to the home stretch, it will be a competition. And in more recent times and I place a grain of salt on all of the published polls, but if you look at the published polls then towards the end of this year, rule of thumb you’re looking at a 48 to 52 two party preferred split around that, and with 12 months to go there’s many a government including the Hawke Government and the Keating Government who went on to win from that position.

So I continue to be of the view that it will be a competition, and I also continue to be of the view that when the Australian community start to focus on the comparison not just focus on government in isolation, they will find Tony Abbott and Tony Abbott’s Liberals wanting. So it will be tough and tight, but it will be a genuine competition.

LYNDAL CURTIS: If we can get back to the election in the US, in policy terms, the re-election of Barack Obama would mean, wouldn’t it, on particularly the rebalancing or the pivot to Asia, it’s steady as she goes, there’s still some more work to do on the defence arrangements with Australia but you would expect, wouldn’t you, that to proceed smoothly?

STEPHEN SMITH: From a selfish Australian point of view, obviously the re-election of a President and his general team does provide continuity. From our perspective, that’s a good thing. We of course, as the Australian Government, would work with whatever administration the United States electoral process produced. But in terms of continuity, in terms of familiarity with the President’s team, it makes as you say it’s continuity, it’s certainty and from our point of view that’s a good thing.

We can continue to do the things that we’ve been doing closely with the United States, both on the economic front, the trade prosperity investment front but also on the national security side, and that continuity will be reflected next week when we see AUSMIN, the Australia US Ministerial consultations, take place here in Perth.

LYNDAL CURTIS: One of those people you will be meeting at AUSMIN next week, the Secretary of State Hillary Clinton, has said she won’t be continuing in this job. Do you think AUSMIN will be one of her last functions of this type?

STEPHEN SMITH: Certainly you’d expect it to be her last visit to Australia as Secretary of State. She will be in Perth for a couple of days for AUSMIN. She’s then proposing, as I understand it, to spend a bit more time in Australia but she will then head off to the East Asia Summit. So she’s got a range of important international summits to attend, to attend, but it will very good to see her down here. She was here for AUSMIN in Melbourne back in 2010. So she’s very well regarded in Australia, very popular, so her visit will attract a lot of attention.

But it’s a good thing to be able to do one more Australia-United States Ministerial consultations with her. She’s been a most effective Secretary of State for the United States and she’s been a very good friend of Australia.

LYNDAL CURTIS: What will be the focus of the AUSMIN talks next week?

STEPHEN SMITH: We’ll be looking, I think, at continuity so far as the enhanced practical cooperation between Australia and the United States is concerned. You’ll recall of course that when President Obama was here, back in November of 2011, we announced the rotation of Marines through Darwin. We’ve seen the first rotation of that occur in the course of this year. Some 200, 250 Marines. We expect the same amount next year and the assessments of that are that it’s gone well. So essentially we’ll do a stocktake of the Marine rotation. And I suspect-

LYNDAL CURTIS: But there are also some decisions to be made, aren’t there, about whether we see more US planes and what happens with maritime arrangements, a possible increase in maritime arrangements too?

STEPHEN SMITH: I think we’re a fair way from decisions on that front. We focused on our first priority which was the marine rotations through Darwin and we’ve seen unilateral training by the Marines and some bilateral work with us and the prospect of some trilateral exercises with Indonesia next year, so that’s going well.

I wouldn’t say that we’re in a position to be making any decisions about the two other areas that we have put down for discussion generally, and that is enhanced United States aviation access or aerial access through our Northern Territory airfields, in particular, Tindal, RAAF Tindal and RAAF Darwin. We’ll start a conversation on that. And because we are in Perth and we’re effectively on Australia’s Indian ocean capital with HMAS Stirling, our Indian Ocean port we’ll also I think start a conversation about the potential down the track for enhanced naval access to Stirling but that’s very much the third cab off the rank so far as our enhanced practical cooperation is concerned.

LYNDAL CURTIS: Now, while we’ve seen the leadership of the United States settled this week, China’s just began its once in 10 year leadership transition. What are you watching out for from China?

STEPHEN SMITH: Well, they started their Congress yesterday. This time next week we’ll see the Politburo Standing Committee emerge and that’s where most interest will lie. And there’s plenty of speculation out there, but in my own case I’ll patiently wait.

There’s speculation for example as to whether the Standing Committee will be seven strong or nine strong. What we do know with certainty is that Vice-President Xi will become the new President. Taking over from Hu Jintao. And again from Australia’s perspective, he’s a Chinese leader who’s very familiar to us. I have met him myself on a number of occasions. More importantly he has been to Australia on numerous occasions.

The last time I met with him in Beijing he made point he’d been to every State and Territory of Australia other than Tasmania. So the basis that in a week’s time he becomes the President, I’m sure our Tasmanian colleagues will be out there trying to get a visit by the Chinese President down to Tasmania.

But we’re familiar with him, as we are the person who we expect to become the premier, Vice Premier Li, he is also well known to us. So in terms of the leadership transition we know the personalities. That gives you a good start. I don’t overstate that. We will continue to work very closely with the Chinese authorities and our Chinese friends because we have a comprehensive bilateral relationship with China. It’s very important to us. It’s also very important for regional and global prosperity and security that China continues to emerge as a positive force and that we don’t see tension or strategic competition between the countries that we regard as superpowers, United States, China as it emerges and India as it emerges as a superpower.

LYNDAL CURTIS: One of the analysts from the Lowy Institute argued earlier this year that the economic ties between Australia and China are well developed. But the political and strategic relationships aren’t so well developed and some more work needs to go into that. Do you think that view has any validity?

STEPHEN SMITH: I think any country who has a relationship with China at this point in the cycle tends to have a more well developed economic engagement or relationship than they do on the political, military or strategic front. Having said that, Australia has got more well developed and enhanced military to military defence to defence political and strategic relationship with China than most others.

For example we’re now coming into our sixteenth year where the chief of our Defence Force and the Secretary of our Defence Department meet with the Chinese military and defence leadership. We’ve been having a strategic dialogue with China initially at Foreign Ministers level since 2008.

So we are pleased with the way in which we have developed those. But as the Prime Minister and the Foreign Minister have made clear, enhancing that bilateral architecture is one of our priorities and that of course was reflected by the recent Asia century White Paper.

More importantly the point I make is that with the United States and China we see a very intense economic engagement and entanglement between China and the United States. What we do want to see, most importantly, is China and the United States raising the level of their political and strategic and defence and military engagement. That’s the most important development, I think, that we want to see in what is effectively the most important bilateral relationship, the relationship between the United States and China.

LYNDAL CURTIS: Stephen Smith, thank you very much for joining us today.